(AP) – Former New York City police commissioner Bernard Kerik has rejected a plea deal offered by federal prosecutors pursuing multiple charges against him, most related to his failed bid to become Homeland Security secretary, The Associated Press has learned.

Any indictments against Kerik could prove embarrassing to former Mayor Giuliani, the now-Presidential hopeful who appointed Kerik police commissioner and recommended Kerik for the Homeland Security post.

A person close to the federal investigation said prosecutors could indict Kerik on multiple felony counts, including tax evasion, conspiracy to eavesdrop and providing false information. Indictments are not believed to be imminent, according to the person, who spoke on condition of anonymity because the investigation is continuing.

The individual familiar with the probe said Giuliani is not believed to be under investigation, and he and his consulting business, which once employed Kerik, have been cooperating.

Kerik’s lawyer confirmed Saturday that he had turned down a plea bargain offer that included prison time because he “did nothing wrong.”

“He paid his taxes. He is not going to plead to something he did not do,” Kenneth Breen told The Associated Press.

Representatives of the federal prosecutor’s office in New York, which is conducting the investigation, did not immediately respond to requests for comment on Saturday.

The false information and tax evasion charges relate to Kerik’s failed nomination for Homeland Security secretary, the person close to the investigation said. Kerik withdrew his nomination after acknowledging he had not paid all taxes for a family nanny-housekeeper and that the woman may have been in the country illegally.

Prosecutors also are investigating whether Kerik failed to declare on his federal tax returns gifts that he received while serving as the city’s corrections commissioner.

Kerik could also face charges of conspiracy to eavesdrop for conversations he had in 2005 with former state attorney general candidate Jeanine Pirro, who wanted to secretly record her husband because she suspected him of having an affair, the person said. Pirro spoke with Kerik at the time about possibly placing a recorder in a boat to listen in on her husband.

Any indictments against Kerik could come during a sensitive time for Mr. Giuliani, the front-runner for the 2008 GOP presidential nomination, a longtime observer said Saturday.

“I think it has an impact, and the impact will be negative,” said Doug Muzzio, a Baruch College public affairs professor. “But it’s certainly not fatal. It’ll be one of the straws on Rudy’s back, but not necessarily the one that breaks his back.”

Mr. Giuliani acknowledged again on Friday that he made a mistake when he recommended Kerik for the homeland security job after The New York Times reported Mr. Giuliani was warned about Kerik’s relationship with a company with suspected mob ties before he appointed him police commissioner.

A spokeswoman on Friday declined to explain why Mr. Giuliani appointed Kerik commissioner despite having been given information about Kerik’s relationship with the company, Interstate Industrial Corp. The company has denied having ties to organized crime.

Appearing at an event Saturday in Manalapan, Fla., Mr. Giuliani said he did not remember being briefed about Kerik’s ties to Interstate Industrial, but that his former chief investigator recalled briefing him on Kerik’s relationship with the company. The statement echoed his testimony before a Bronx grand jury, which was first reported in the Times.

Asked whether he thought people would question his judgment as a result, Mr. Giuliani said that would be up to the public.

“They have a right to question everything about me,” he said. “I’ve had a long career, maybe in some ways the longest and most complex of anyone running for president. That gives you some great successes and failures.”

Last June, Kerik pleaded guilty to a misdemeanor charge of accepting a gift from Interstate Industrial, which was seeking city work. In a deal that let him avoid prison, he acknowledged accepting $165,000 in renovations on his New York apartment from the company.

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Associated Press writers Verena Dobnik and Jessica Gresko contributed to this report.